PHILIPPINES--Philippine technology company IP Ventures Group (IPVG) plans to acquire a majority stake in PeopleSupport, one of the biggest contact centers in the country with over 8,000 seats.
In a statement released Tuesday, IPVG said it has submitted a proposal indicating an all-cash offer of US$355 million, or US$15 per share, the target valuation of Nasdaq-listed PeopleSupport. Although headquartered in the United States, the majority of PeopleSupport's employees are based in the Philippines.
IPVG has also signed a memorandum of agreement with investment house AO Capital Partners for the planned acquisition. Both have agreed to infuse and raise necessary debt and equity funding from internal and third parties.
In an e-mail interview, Enrique Gonzales, IPVG CEO, said the planned acquisition "is part of our strategic acquisition road map".
"We are taking IPVG regional and global. We want to establish our market leadership beyond the Philippines. BPO (business process outsourcing) is one business that can scale up quickly and make meaningful contributions to our overall growth and performance," he said.
The executive said IPVG sees PeopleSupport as a good acquisition given its scale, position in the marketplace and heavy concentration in the Philippines.
Gonzalez said the company plans "to continue making bold moves in this space as we aim to become one of the top BPO companies in the region".
More acquisition plans are in the pipeline, Gonzalez added.
IPVG has a wide range of interests in the Philippines, including online gaming and outsourcing. While it has its own contact center unit, the company has been aggressively acquiring BPO firms.
Prior to the planned acquisition of PeopleSupport, the company acquired the assets of Global Stride, a contact center operation located in IBM Plaza, Eastwood City, Libis, earlier this year.
The company also said it is "extremely bullish" about the future of the BPO industry in the Philippines, predicting that demand for BPO services will continue to grow at a double-digit pace over the next several years.
According to IPVG, the Philippine BPO market is expected to grow to US$11 billion with over 500,000 seats by 2010, from US$2.1 billion and 200,000 seats in 2006.
Joel D. Pinaroc is a freelance IT journalist based in the Philippines.